For those who have tried to obtain an ARC loan, the road can be arduous and unproductive. Most banks have walked away and those who are interested do so primarily for their own customers with existing credit cards and loans. And the process, hang on to your hats, it can take weeks with piles of paperwork. Are there alternatives?
In fact there are. SBA small loans in the $ 5,000-35,000 category are also available under the Community Express and Patriot Express stimulus loan programs. They have not become as popular, but they are real. These are the highlights:
o No warranty, no links on your business property or residence
o Minimal paperwork. Many of them do not require tax or financial returns. Paperwork and simple SBA-approved business plans are optional. Under the Community Express program (no business plan required for Patriot Express), there is a requirement for a business plan prior to funding, but the SBA has established a simple online network where the form can be completed quite easily. .
o Due to simple paperwork, responses can be generated within 48 hours.
o Funding is also expedited, usually in the neighborhood of fourteen days.
o Interest rate is based on the Wall Street Journal Prime Rate, plus an SBA-regulated minimum rate. These loans are around 7.75%.
o No prepayment penalties. You can cancel the loan and stop the interest with only twenty days in advance.
Also, unlike ARC loans, they can be used for any genuine business purpose, including payroll, inventory, advertising, accounting, computers, overhead, and general cash flow needs. Funds are transferred directly to your business account with automatic ACH debits, eliminating coupon payments.
So what are we waiting for? The trick is to find an SBA-licensed lender who is actually doing them, and the news is there are multiple sources. These are the banks that are really interested in lending to small businesses, perish the thought in this troubled economy!